EU Wheat Closing Comments

EU wheat futures closed with November London feed wheat GBP0.10/tonne higher at GBP105.15/tonne and with Paris January milling wheat up EUR1.25/tonne at EUR134.75/tonne.

London wheat was down for most of the day but recovered late in the session after American futures moved higher, contrary to early calls.

Outside markets also helped EU futures move higher, as too did a continued lack of farmer interest in selling at current levels, much to the consternation of some participants.

Oil World said that world production of biodiesel will be boosted by 20% to 19.2 MMT in the 2010 calendar year.

The UK will shortly see the opening of the 1.2 MMT/per annum wheat requiring Ensus bioethanol refinery on Teesside. A similar sized refinery is also due to be opened early in the new year in Rotterdam by Spanish company Abengoa.

Ukraine remain an aggressive merchandiser, selling 100,000 MT of wheat to Bangladesh overnight. However, Ukraine's wheat stocks on Nov 1st were 11 MMT, down 4.75 MMT since Sep 1st, according to the state statistical office. Clearly they simply cannot go on exporting at this rate.

In the US winter wheat planting is still behind schedule at 90% completed. In the potential problem SRW states of Illinois, Indiana and Missouri emergence was only 45% (92% normally), 55% (90%) and 33% (72%) respectively. That potentially leaves the crop vulnerable to lower yields in 2010 from under-developed wheat going into winter dormancy.

In Illinois wheat planting was only 77% complete as of Sunday, compared to 98% normally. With the ideal final planting date for SRW already well passed, many farmers here are expected to take the so-called 'prevented planting' option on their crop insurance, rather than attempt to get a crop into the ground at this late stage.

Overall SRW wheat plantings in the US are expected to fall by up to 1.7 million acres this season, or 20%, because of the latest corn and soybean harvest on record, and the extremely soggy underfoot conditions.